Waaree, BHEL, Tata Steel, BEL, HAL among biggest budget beneficiaries by HDFC Securities

The Union Budget 2026-27 arrives during a period of global uncertainty, placing a strong emphasis on structural reforms and maintaining a stable policy regime. The government's approach blends ambition with prudence, featuring conservative revenue projections and focused expenditure in critical sectors, said HDFC Securities.

Union Budget was divided into three 'kartavyas' (duties) including to accelerate & sustain economic growth; fulfil aspiration of our people and vision of 'sabka sath, sabka vikas', said HDFC Securities. In a nutshell, it believes that the Budget was majorly positive for sectors like IT, textiles, manufacturing, pharma and biotech, while it was negative for capital markets and PSU banks.

Despite the budget's sound mathematics, markets reacted negatively—not due to fiscal weakness, but because expectations were not met. The unexpected increase in the Securities Transaction Tax (STT) on derivatives trading surprised market participants, aiming to discourage speculative trading but triggering a sharp sell-off, it noted.

A notable shift in the government's revenue composition is seen, with GST and other indirect taxes now comprising only 15% of total resources, down from 18% the previous year. This contraction reflects the impact of prior comprehensive tax rationalisation measures, said the domestice brokerage.

Capital expenditure receives significant attention, with an allocation of Rs 12.22 lakh crore—4.4% of GDP—the highest in over a decade.  For micro, small and medium enterprises (MSMEs), the budget introduces a credit guarantee mechanism for invoice discounting on the TReDS platform and enables TReDS receivables as asset backed securities, aiming to foster secondary market development and improve liquidity.

The revised divestment target rises sharply from Rs 33,837 crore to Rs 80,000 crore, reflecting optimism for stake sales in PSUs and asset monetisation. Liberalised investment norms for NRIs and tax holidays for foreign companies providing cloud services via Indian data centres are expected to attract capital and strengthen digital infrastructure.

The budget recognises the tourism sector's potential for employment and forex earnings, and the long-term strategy of providing tax holidays for foreign cloud service providers positions India favourably in the global digital economy.

For the auto and auto component companies, PLI was raised to Rs 5,939 crore, which is a major positive for all the companies. It has picked Ashok Leylan, JBM Auto, Tata Motors, Exide and Amara Raja as its top picks. Reduced custom duty on components and engine parts for manufacturing of aircrafts will also be a positive for the aviation sector.

The budget also proposed the Biopharma SHAKTI with an outlay of Rs 10,000 crore over the next 5 years. HDFC sees Sai Life, Aarti Pharmalabs, Anthem Bioscience, Divi’s Labs, Piramal Pharma, Zydus Life, Biocon as the key beneficiaries. Budget is also positive for formulation players.

The FM also  increased STT on derivatives transactions from 0.02 per cent to 0.05 per cent for futures and 0.1 per cent/0.125 per cent to 0.15 per cent for options. The move is negative for broking companies and exchanges, while the  permission to PROI to invest in equity instruments through Portfolio Investment Scheme is positive for wealth management players.

The government also announced a capital expenditure outlay for the infra sector worth Rs 12.2 lakh crore. It is positive for cement and metal companies. From the infra pack, HDFC Securities has picked L&T, PNC Infra, KNR Construction, NCC, BHEL, Timken India, Unimech, Escorts Kubota, AIA Engineering, KEC International, Adani Ports, Concor among others.

Besides that, the outlay on defence is less than expectations but it will be positive for companies like Midhani, Bharat Electronics, Bharat Dynamics, Hindustan Aeronautics and Zen Technologies among others, said HDFC Securities. The government has allocated Rs 74,560 crore for IT and Telecom sectors, which bodes well for TCS, Infosys, Wipro, HCL Tech and data centre companies like Netweb.

In the Union Budget, the Government proposed to increase the outlay to Rs 40,000 crore for electronics components manufacturing scheme, which is seen positive for EMS players like Kaynes, Syrma, Avalon, Cyient DLM along with Zensar Tech. From the healthcare space, HDFC has picked Max Health, Apollo Hospital and Aster DM as the biggest gainers.

From the metal pack it has picked GMDC, NMDC, Vedanta, Tata Steel, JSW Steel, Ultratech Cement, while renewable energy announcements bodes well for NPTC, Tata Power and Waaree Energies. KPR Mills, Arvind and Gokaldas Exports are its top textile picks, while Lemon Tree, Indian Hotels, InterGlobe Aviation are top names from travel and tourism themes.